Ex-Arvest Banker Dennis Smiley Draws Criminal Scrutiny

by George Waldon and Gwen Moritz  on Monday, Apr. 7, 2014 12:00 am  

Executives holding these phantom shares could, upon leaving the company, cash in the stock for a price tied to the book value of Arvest.

However, until recently, the banks did not know that Smiley pledged the same collateral over and over again with multiple lenders.

The alleged scheme allowed Smiley to use an asset valued at more than $393,000 in the Delta Trust loan documents to help borrow more than $4.5 million through a series of fraudulent loans.

Delta Trust is among nine lenders to file UCC financial statements in connection with loans to Smiley secured by uncertificated Arvest stock. The other banks are:

  • First National Bank of Fort Smith;
  • First State Bank of Northwest Arkansas in Huntsville;
  • First Western Bank of Booneville;
  • First State Bank of De Queen;
  • Integrity Bank (formerly First National Bank & Trust) of Mountain Home;
  • Chambers Bank of Danville;
  • The Bank of Fayetteville; and
  • First Security Bank of Searcy.

According to sources, other banks made similar loans but did not make UCC filings. Such filings aren’t mandated.

Arvest’s interpleader filing lists 10 additional banks as having potential claims on Smiley’s phantom stock money:

  • BOKF of Tulsa;
  • Bank of the Ozarks of Little Rock;
  • Benefit Bank of Fort Smith;
  • Centennial Bank of Con-way;
  • First Bank of Hampton (Calhoun County);
  • First Federal Bank of Harrison;
  • First State Bank of Lonoke;
  • First State Bank of Rus-sellville;
  • Legacy National Bank of Springdale; and
  • Summit Bank of Arkadelphia, which is being acquired by Bank of the Ozarks Inc.

The nature of the claims not listed in UCC filings is unknown. Arkansas Business’ sources say the loans secured by the stock were generally in the $200,000 range and that Smiley also received unsecured loans from some of the banks.

The probe also is looking into allegations that Smiley used stakes in limited liability companies as part of the loan fraud scheme, according to sources.

Signature Bank of Arkansas in Fayetteville filed a UCC financial statement tied to a 20 percent stake in HDS Holdings LLC used as collateral on a September 2009 loan.

No other UCC filing is on record in connection with his ownership of HDS Holdings. Such filings aren’t mandated for this type of collateral either.

Arvest spokesman Kincy said the company expects to name a replacement for Smiley later this month:

“We are in the process of selecting a replacement president for Arvest Bank, Benton County, and will make an announcement sometime in April.

“Arvest has many talented individuals and we’re confident our new president will be a good leader, sound banker and someone who understands and lives the Arvest culture of serving the needs of the local community.”

 

 

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